Direct Transfer to Disabled Child; Previously Unknown Resource. Applications for Medicaid were filed on November 24, 2008 and January 8, 2009. The first application was denied for failure to provide documentation. The second was approved on April 16, 2009 with assessment of a penalty through 2009. The transfer was directly to a disabled child rather than a trust for the sole benefit of a disabled child. During the eligibility process, a previously unknown resource was discovered which DFCS argued cause Petitioner to be over resourced. The ALJ applied to 42 U.S.C. 1396p(c)(2)(B)(iii), reversing the penalty assessed on transfers to a disabled child. The previously unknown resource was a life insurance policy. Section 2300-2 of the ABD Manual provides: “If an individual is unaware of his/her ownership of an asset, the asset is not a resource during the period for which individual was unaware of the ownership. The previously unknown asset, including any monies (such as interest) accumulated on it through the month of discovery by the individual, is income only in the month of discovery.” The policy was not discovered until March, 2009 by Petitioner’s representative and there was clear evidence that Petitioner had Alzheimer’s since 2002 and was unable to communicate with her family regarding her finances. The ALJ reversed assessment of the transfer penalty, but remanded the case for determination of how to treat the insurance policy discovered in March 2009.

Lawrence v. Department, (July 23, 2009).